Ethereum L2s Arbitrage, Optimism and Polygon Look at Profits Before Denkun Update

With Denkun's update just hours away from going live on the Ethereum mainnet, layer-2 scaling solutions tokens like Arbitrum, Optimism, and Polygon have all made big gains.

Arbitrum is the only one to see double-digit gains as the Ethereum community counts down the minutes. The ARB token increased by 11% in the previous day and 7.5% compared to the previous week. ARB rose as high as $2.25 early Wednesday morning, but was around $2.20 at press time.

Arbitrum is one of the largest cryptocurrency exchange solutions with a total value of $16 billion according to L2Bit. That gives it 41 percent of the L2 scale solution market share.

The Ethereum Layer-2 (L2) solution is a secondary framework or protocol built on top of the Ethereum blockchain. The main objective of these solutions is to increase the network's transaction capacity and improve scalability without compromising security.

This means L2 users get all the security benefits of Ethereum mainnet decentralization without paying the often high gas fees on Ethereum.

The Denkun update, which will happen later today, will improve Ethereum's underlying architecture so it can process data more efficiently. With it, developers say L2s will reduce their operating costs and users will see a 75% reduction in transaction fees.

Meanwhile, Optimism, which hosts 24 percent of Ethereum's L2 supply, saw its OP token rise 3 percent in the previous day. OP gained 27% last month, but down 3.5% from last week. According to CoinGecko data, at the time of writing, OP is changing hands at $4.50.

Just last week, Optimism Foundation announced the entry of 19.5 million OP tokens in a private sale. The foundation did not say who the buyer is, but said the deal includes a 2-year grace period. While the tokens are locked, they can still be delegated to third parties to vote on management proposals.

Polygon, formerly known as Matic Network, maintains the Polygon PoS token bridge. With a market share of 30% according to L2bit, Ethereum is the most dominant among L2 bridges and is far and away. Token bridges allow users to move assets from one network to another.

At the time of writing, its MATIC token has gained 4.7% in the past day and is trading at $1.24. The token has gained an impressive 18% since last week and has a capitalization of $11.5 billion according to CoinGecko.

And Ethereum ETH managed to keep its head above $4,000 during the Denkun upgrade. At the time of writing, ETH is trading at $4,055.30 and has gained 1.2% over the past day. It rose 6.5% last week before breaking above $4,000 for the first time since 2021.